The Gazette 1984

GAZETTE SUPPLEMENT

APRIL. 1984

negotiated a separate contract with Cork County Council. The business of the company in receivership did not exist in relation to the contract work at Bantry when the respondent contracted to complete the outstanding work and there could not, therefore, be a transfer or change of ownership of a business or part of a business. The Tribunal held that the service of each of the claimants with the company in receivership could not be added to their service with the respondents and, as they did not, therefore, have the minimum service with the respondents necessary to qualify for a redundancy payment their claims were dismissed. Cases of this sort should be of help in interpreting the scope and applica- bility of the Acquired Rights Regulations, keeping in mind the added proviso that, under the Regulations, there must be a change in employer. Coughlan v. Keane It is believed the Regulations have only been raised once with the Employment Appeals Tribunal in this country, in the case of Coughlan-v- Keane, T/A Keaneland Hotel, Case no. M373 UD256/1982. The claimant was employed as a receptionist at the respondent's hotel from 25th July, 1980, to 16th October, 1981. The hotel closed on 7th October, 1981, and the staff were paid up to 9th October, 1981. The claimant maintained that she was informed on 7th October that the hotel was being sold. On 16th October she was sent home and, when she returned on 27th October, was informed by the hotel proprietor that the new owner would speak to her later about her job. On 3rd November, 1981, the hotel re-opened. The new owner offered the claimant a job on 6th November, 1981, but she refused the offer because the conditions of employment were radically different from what she had done previously. The claimant relied on the 1980 Regulations and maintained that she was unfairly dismissed. After considering the evidence, the Tribunal found that the Regulations did not apply in the case, as there was a break in service, the contract of employment ending when the hotel closed. The Tribunal held that there was a redundancy situation and, under the provisions of Section 6(4)(c) of the Unfair Dismissals Act, 1977, dismissal due to redundancy was deemed not to be unfair and the claimant's claim was dismissed. It should be noted that the claimant was not legally represented and it would appear that the Regulations were not opened to the Tribunal in full. The Tribunal appears to have accepted that the transferor of the hotel terminated the claimant's employment. It would appear in that event that the transferor must justify such termination on the grounds of economic, technical or organisational reasons entailing changes in the work force, as required by regulation 5 of the Regulations. This does not appear to have been done in this case. UK Industrial Tribunal Cases A number of decisions have been given by Industrial Tribunals in the U.K. touching on the regulations. In Bachelor -v- Premier Motors (Romford) Ltd. and Petropolis Limited, COIT 13 59/181, the claimant was the manager of a petrol station. On 5th April, 1982, his employers, the first named respondents, entered into an agreement for the sale of the petrol station to the second named respondents. Completion of the sale took place on 1st June, 1982, and this included the sale of the premises, fixtures and fittings and other minor pieces of equipment and stock. It was expected that customers would continue to use

the petrol station after the sale. Premier Motors were prohibited from meeting with Petropolis Limited after the sale. Mr. Bachelor was not taken on by the new owners and claimed unfair dismissal and redundancy payment. The Tribunal held that the regulations were applicable as the sale was the transfer of a business involving a change in employer. The relevant factors in their mind being: (a) although the sale agreement referred only to the sale of the lands and buildings there was an effective transfer of the business; (b) although there was no express assignment of goodwill, goodwill was effectively transferred because Premier had agreed not to sell petrol on adjoining lands so depriving themselves of the power to compete; (c) it was likely that Petropolis Limited would continue to trade with the same customers as Premier and (d) Petropolis Limited intended to carry on exactly the same business as Premier had carried on. Mr. Bachelor was, therefore, able to sustain a claim of unfair dismissal against Petropolis Limited. A somewhat similar case was that of Walker and Others -v- Masters and Milburn and Smiths Prompt Service Depot COIT 13 66/98. Smiths ran a car sale and repair business, selling both new and old cars with the franchise from B.L. The business was owned by Mr. Smith, but he had little to do with the actual running of it as he was in full-time employment elsewhere. Trade was poor and Mr. Smith decided to sell the business. M. & M. were interested and discussions about the proposed sale began. M. & M. were not interested in selling the used cars but otherwise wished to carry on the same sort of business as Smith had done. Agreement was reached that M. & M. should purchase the premises and all the equipment, furniture, fixtures and fittings. Mr. Smith disposed of a number of used cars. There were also new cars but these were held under the B.L. franchise. It was accepted that there would be no difficulty in M. & M. obtaining the franchise. Other stock was also transferred. Mr. Smith did not intend to carry on a similar business elsewhere after the transfer but there was no clause in the agreement prohibiting him from competing. M. & M. went into occupation of the premises on 1st June, 1982 and a formal sale agreement was completed about a month later at which time M. & M. also obtained the B.L. franchise. During the first month of occupation there was some disruption while M. & M. carried out various building operations and waited for the transfer of a British Leyland franchise. The Tribunal considered the following facts as relevant: (a) after the sale Mr. Smith did not intend to set up a business elsewhere and it was unlikely that Mr. Smith would ever compete with M. & M., particularly as he had given up the B.L. franchise; (b) apart from used cars, all assets were transferred; (c) some of the employees were kept on after the transfer by M. & M.; (d) although no goodwill had been transferred, this was because it had no monetary value and so was not included in the agreement. M. & M. argued that the business was in such poor financial state when they took over that there was effectively no business to transfer and that they had simply acquired the premises with a view to starting afresh. The Tribunal, however, held that the state of the business was not relevant and that there was a transfer of a business. The Tribunal concluded that the transfer was a transfer as envisaged by the Acquired Rights Regulations and continuity of employment should be preserved for the two employees who were retained by M. & M. and that the two employees who were not kept on could claim unfair

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